August 2018

Viewing posts from August , 2018

The days are getting noticeably shorter. That means summer is winding down and sellers will soon be in the last quarter stretch run to meet or beat quota. This is a good time to have sellers take a hard and realistic look at where you’re likely to wind up for three reasons:

They still have “runway” with 4 months to get where you want/need to go.

If they wait until November or December salespeople will always find a way to make their numbers, but often by being overtly optimistic in having to close virtually everything they’re working on. Sales managers know how unlikely that will be.

How sellers finish this year can have a great impact on their 2019 achievement. If they must close everything in the pipeline they may have to face the reality of having 2019 effectively be a 10-month year.

1. Take a hard look at your pipeline opportunities.

A good place to start is to have a hard look at each opportunity in the pipeline today and answer the following questions in trying to determine if you may be “Column A” (the vendor of choice):

What is the highest level that you’ve had access to?

What outcomes are they hoping to achieve and is there sufficient value to justify the expenditure you are asking them for?

Whose numbers were used to create budget?

Who is your competition and what level have they been able to call on?

2. Remove the stale, dead weight.

If you have opportunities where quotes or proposals have been out there for more than 45 days, consider withdrawing them. If decisions are going to be made prospects like to have all vendors competing so they can have leverage in negotiating the best price. Let’s assume you have not gotten to decision maker levels. The conversation can go something like this:

My quote was issued over 45 days ago and no decision has been made. You indicated Sally Jones would make the decision. Can we meet with Sally because I’d like to offer a cost vs. benefit to estimate potential payback. I just don’t want to spin my wheels on this transaction.

Unlike fine red wines, proposals have half-lives. As each day passes a seller’s chance of getting that business erodes. Better to try to qualify or disqualify them rather than continue to hope they may close.

3. Negotiate Sequence of Events (SOE).

Once the pipeline has been given a sanity check do you have or will you be able to negotiate Sequences of Events with customer and prospects? This means allowing the buyer to estimate a timeframe for making the decision and then the seller negotiating a written document with steps and estimated dates that culminate in making a recommendation (providing a written proposal).

4. Look for new, hidden opportunities.

Try to determine what new opportunities you can uncover. If sales cycles are too long, take a hard look at any add-on transactions that you may be able to close. Typically, when dealing with customers legal documents are already in place and sell cycles are considerably shorter.

5. Crunch the numbers.

If you want to minimize the stress of year end crunches for 2019 and beyond treat each month as a small closing and track where you expect to be in the future. If your annual quota is $1,800.000 your monthly target is $150,000. Next estimate a typical length of sales cycle. If it’s 4 months, then multiply your monthly target by 4. This means you will expect to generate $600K over that period. Now divide that figure by the decimal equivalent of your close rate. For example if you have a 50% win rate on opportunities ($600K)/(.5) means your target is $1,200,000 if you are YTD or better against quota. Let’s say in January a seller was $50K short the revised target would be $1,300,000 (double the short fall and add it to the target).

By doing what amounts to 12 small closes during a year, sellers are far less likely to wind up scrambling at year-end. YTD calculations are trailing indicators, effectively a look in the rear view mirror. The calculations I suggested are leading indicators in always knowing the revenue needed to get or remain YTD in the future.

The two most significant drivers in these calculations are win rate and length of sell cycle. For the example above by increasing win rate to 66 2/3% and decreasing average sales cycles to 3 months means the target for a seller YTD or better becomes $676,000.

Starting at Key Player levels and building strong cost vs. benefit analyses will often mean shorter sales cycles.

In recent years, selling to the B2B market has presented new challenges for companies such as buyers’ growing tendency to vet vendors using online research and the interplay between the B2B and B2C buyer experience.

B2B buyers identifying and selecting their top tier of vendors for purchase evaluations—including the short list of contenders—often do so with very little or NO input from sales or company reps. Buyers also expect excellence from their vendors, based largely on their expectations from their experiences as consumers in B2C transactions.

So, what should companies selling to the B2B market know before they engage with their buyers?

Selling to the B2B Market

1. The buying process will happen (mostly) without you

In terms of vetting vendors, the key take away is the fact that digital access to information has resulted in a shift of power from sellers to buyers. Instead of going to sales reps and company sources for most (if not all) of their information, buyers today can research vendors, products, services, support, add-ons, pricing, partnerships, and many other factors online, using company websites, user groups, virtual opinion leaders, blog posts, videos, SlideShare and presentation postings, and investor details.

The Corporate Executive Board estimates that close to 60% of buying activities are finished before a sales rep is even involved. Forrester estimates that up to 90% of the buying process is completed before sales is brought in. Buyers who are evaluating technology for their businesses complete more than half of their evaluation before contacting a sales rep. And they’re often seeking out users instead of either vendors or analysts.

It’s important to remember that B2B buyers are doing much of their investigative work about vendors and their offerings before they ever reach out to sales or company representatives for information.

What You Can Do:

Put your best digital face forward

Make sure you’re providing rich content to your audience, not only about your products or services, but also about your market leadership, your customers, and the industry overall, including trends that could impact the market in the near- or long-term.

Integrate Sales and Marketing

While Marketing and Sales have not always worked closely together, in the digital age it’s essential they present a consistent message to buyers. There’s even a term HubSpot coined — “Smarketing”—to describe an integrated sales and marketing strategy.

Especially at the beginning of the discovery process, Marketing must take increased responsibility for engaging and nurturing prospects. Toward the end of the buying process, Sales may play a larger role. Throughout the process, Sales and Marketing must be integrated and appear seamless to buyers.

Have a multi-channel presence

Because buyers will be looking for details about your company and products using different channels, you’ll need to have a presence in the channels buyers are likely to be in, including website content, social media, webinars, case studies, blog posts, online videos, and white papers.

2. Buyers expect B2C excellence from B2B vendors

Like the rest of us, B2B buyers don’t operate in a vacuum. They compare their experiences as consumers in their personal lives to their experiences as buyers in their professional lives. For example, if someone has a seamless experience buying dog food on their mobile device at 3 a.m., they want to repeat that positive experience when purchasing your product, whether it’s industrial machinery, staffing services, or anything in between.

Practical Ecommerce notes that B2B companies selling their offerings online recognize that the customer experience for business buyers is just as important as the customer experience for consumer purchasers. Avanade highlights the consumerization of IT – policies such as “Bring Your Own Device” or BYOD – mean that the traditional delineations of B2B and B2C are no longer relevant. Instead, it’s now business to everyone since there are low or no barriers to information.

What You Can Do:

Model your systems after the best B2C companies

There’s really one large, over-arching implication for the B2C/B2B convergence trend, and that is to model your systems, processes, and customer interactions after the best B2C companies, usually consumer packaged goods companies, such as Proctor & Gamble or Unilever. This means having a mobile-ready platform, investing in technology to support better customer service and customer experiences, and offering self-service tools, such as pricing and ROI calculators.

McKinsey highlights the fact that most business buyers use six or more channels to evaluate potential vendors – a theme highlighted earlier – along with the fact that most buyers (65%) report poor and inconsistent experiences between the different channels. Using technology and systems to ensure consistency in user experience will help in this regard.

While Customer Experience, or CX, has historically been the focus of B2C organizations, it’s now making a big play in B2B enterprises as companies seek to better understand their customers’ experiences along the entire life cycle of the customer’s engagement.

One way companies are understanding their customers’ experiences is using personas and customer journey mapping. Using Personas and Journey Mapping, companies are increasingly focused on Customer Experience to drive differentiation and increase profitability. (To learn more about Customer Experience, download this guide.)

Personas vs. Journey Mapping:

* Personas

* Journey Mapping

Journey mapping is just what its name implies – it provides a map of the journey customers take with their vendors, from initial discovery to product evaluation to product usage to product support to eventual end of life or product retirement. (Check out 15 Powerful Customer Journey Maps.)

As competition intensifies in the B2B environment, customer experience initiatives can be used to both differentiate companies and to increase profitability. Because buyer personas can help to guide product development and create better marketing campaigns, they’re typically used by companies to help drive detailed customer segmentation, helping companies understand different buyers’ attitudes and criteria for purchase decisions.

Customer journey mapping can help companies identify how internal processes help or hinder their customers’ experiences at every stage along the journey through capture and labeling of customer thoughts, feelings, and perceptions. Journey mapping can also illustrate customer expectations versus reality, as well as opportunities for improvement in each phase of the mapping process.